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This will be a potentially busy week of catalysts

This will be a potentially busy week of catalysts: Tom Essaye Quoted in Barron’s


Stocks Open Lower as Bond Yields Rise

“This will be a potentially busy week of catalysts but it starts slowly today as there are no economic reports and just one Fed speaker,” writes Sevens Report Research’s Tom Essaye. “So, absent any surprises, expect yields to drive stocks. If the 10-year Treasury yield drifts lower, don’t be surprised if stocks recoup these early losses.”

“We think Powell will hold his ground and not try to give anything away,” writes Andrew Brenner, head of international fixed income at NatAlliance Securities. “He won’t be that hawkish or show signs of dovishness, although we see Powell as a dove in wolf’s clothing.”

Also, click here to view the full Barron’s article published on March 4th, 2024. However, to see the Sevens Report’s full comments on the current market environment sign up here.

It’ll be Very Hard for This Market to Rally

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The Reason Stocks & Bonds Are Declining (You’ve Seen It Before)

The Reason Stocks & Bonds Are Declining: Start a free trial of The Sevens Report.


What’s in Today’s Report:

  • The Reason Stocks & Bonds Are Declining (You’ve Seen It Before)

Futures are bouncing modestly following solid earnings and positive corporate news overnight.

Earnings overnight were decent as TSMC beat expectations while Bank of American upgraded AAPL.

Economically, however, the Aussie jobs report was soft (- 66k vs. (E) 15k) and that’s increasing global growth worries.

Today focus will stay on economic data as we get two important report, Jobless Claims (E: 206K) and Philly Fed Manufacturing Index (E: -6.7).  The Philly index will be especially watched following the implosion of the Empire Manufacturing survey on Tuesday and if we see a similar number this morning, look for some hard landing concerns to drift higher.

Away from those two reports we also get Housing Starts (1.425 million) and there is one Fed speaker, Bostic (7:30 a.m. and 12:05 p.m. ET), but they are unlikely to move markets.

On earnings, results really ramp up next week but some reports we’re watching today include: TSM ($1.37), PPG ($1.50), JBHT ($1.74).


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Why Did Stocks and Bonds Drop to Start 2024?

Why Did Stocks and Bonds Drop to Start 2024? Start a free trial of The Sevens Report.


What’s in Today’s Report:

  • Why Did Stocks and Bonds Drop to Start 2024?
  • Weekly Market Preview:  Can Data Meet Market Expectations For Growth and Rate Cuts?
  • Weekly Economic Cheat Sheet:  Inflation In Focus (CPI on Thursday)

Futures are slightly lower following some disappointing EU economic data and on hawkish Fed commentary.

Economically, German Manufacturers’ Orders and Euro Zone retail sales both missed estimates, reminding investors of recession risks in Europe.

This weekend, Dallas Fed President Logan warned that financial conditions have eased materially recently and that may prevent the Fed from cutting rates anytime soon.

Today there are two notable market events including the NY Fed Inflation Expectations (E: 3.4%) and comments by Atlanta Fed President Bostic (12:00 p.m. ET).  If either event pushes back on the idea of imminent rate cuts (via inflation expectations being higher than estimates or Bostic sounding hawkish) expect more modest pressure on stocks and bonds.


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Five Measurable Similarities to 2006/2007

Five Measurable Similarities to 2006/2007: Start a free trial of The Sevens Report.


What’s in Today’s Report:

  • Five Measurable Similarities to 2006/2007: A Market Cycle Update

Futures are little changed ahead of the holiday weekend as poor Nike (NKE) earnings weigh on sentiment.

Earnings this week haven’t been great and that continued overnight as Nike (NKE) missed on revenues and cut revenue guidance. The stock is down –12% pre-market.

Economically, UK data was mixed as quarterly GDP declined (-0.1% vs. (E) 0.0%) while retail sales were strong.

Otherwise, the focus will remain on economic data and the key report today is the November Core PCE Price Index (E: 0.2% m/m, 3.4% y/y), which is the Fed’s preferred inflation metric.  It is expected to show declines in the pace of headline and core inflation from October and if that happens, it should support stocks and bonds and reinforce rate cut expectations.

Other notable data today includes Durable Goods (E: 2.4%), New Home Sales (E: 690K) and Consumer Sentiment (E: 69.4, 1-Yr inflation: 3.1%). But barring a major surprise from them, they shouldn’t move markets.

Meanwhile the bond market closes at 2:00 p.m. today with the looming holiday weekend. So, we expect activity to quiet considerably in the markets as the trading day goes on.

Finally, from all of us at Sevens Report Research, please have a happy and safe holiday weekend.

Five Measurable Similarities

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S&P 500 Market Multiple Levels Chart

S&P 500 Market Multiple Levels Chart: Start a free trial of The Sevens Report.


What’s in Today’s Report:

  • S&P 500 Market Multiple Targets – December Update (Shareable PDF Available)
  • Housing Market Update: Where Are the Declines?
  • Housing Starts Come in “Hot” – Chart

Stock futures are modestly lower and bond yields are continuing to fall. As cooler-than-expected European inflation data o/n has investors weighing simmering recession fears.

Economically, U.K. CPI fell from 4.6% to 3.9% vs. (E) 4.3% in November while German PPI was down -7.9% vs. (E) -7.5%. The data is being digested by some as “too cold”. This is causing renewed recession worries which is weighing on risk assets this morning.

Today, we will get two economic reports in the morning: Consumer Confidence (E: 103.4) and Existing Home Sales (E: 3.775 million). The market will want to see more signs of a resilient consumer to reaffirm soft landing hopes and keep recession fears contained.

Finally, in the afternoon there is a 20-Yr Treasury Bond auction at 1:00 p.m. ET which could shed light on how sustainable the bond market rally is. There is a risk that a weak auction outcome could pour some cold water on bonds and lead to some profit taking in equities ahead of more critical economic data due in the back half of the week.

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One Potential Catalyst That Could Shake Up Markets

One Potential Catalyst That Could Shake Up Markets: Tom Essaye Quoted in Barron’s


Stocks Begin Holiday-Shortened Trading Week With a Pause

“One potential catalyst that could shake up markets today is the 20-Year Treasury Bond auction at 1:00 p.m. ET as weak results could trigger a rebound in yields, especially given fading attendance this week and subsequently less liquid market conditions across asset classes,” writes Sevens Report Research’s Tom Essaye.

In the absence of major data that could shift the narrative, investors will be watching key earnings reports like Nvidia on Tuesday. Bond yields will also be in focus.

Also, click here to view the full Barron’s article published on November 20th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

One Potential Catalyst

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

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Treasury Yields To Continue To Drive Short-Term Trading

Treasury Yields To Continue To Drive Short-Term Trading: Tom Essaye Quoted in Barron’s


Stocks Extend Rally After Best Week of the Year

“Today there are no notable economic reports and just one Fed speaker, [Lisa] Cook (11:00 a.m. ET), so look for Treasury yields to continue to drive short-term trading,” writes Sevens Report Research’s Tom Essaye.

The 10-year Treasury yield ticked higher on Monday but was still at 4.614%. The 10-year yield was trading around 5% in October, which weighed on rate-sensitive stocks.

“If the 10-year yield continues to decline then the S&P 500 can extend last week’s rally.”

Also, click here to view the full Barron’s article published on November 6th, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

It’ll be Very Hard for This Market to Rally

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

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Important To Watch The S&P 500 Index’s Support Zone

there’s no way The Fed Can Get Dovish: Tom Essaye Quoted in MarketWatch on MSN


Fed day is here. Here are important technical levels to watch for stocks, bonds, and VIX

It is important to watch the S&P500 index’s support zone from 4,050 to 4,170, where the index spent most of April and May, according to Tom Essaye, founder and president of Sevens Report Research. 
On the other hand, “if policy makers deliver a dovish message and signal the hiking cycle is indeed ‘over’ then a relief rally could see stocks rise rapidly back towards the October highs,” according to Essaye.
The first important technical resistance level to watch is 4,225, while beyond that, investors should keep an eye on the level of 4,330, where the index saw a mid-October reversal. For the 2023 stock market rally to resume, the S&P 500 has to beat its October high of 4,377, Essaye wrote. 
“There is growing evidence that the VIX may be forming a near-term top as the ‘fear gauge’ did not close at new October highs last week despite the S&P 500 falling to new multi -month lows,” Essaye wrote.

Also, click here to view the full article published by MSN on November 2nd, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

Index’s Support Zone

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What Would Stop the Bond Market Selloff?

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What’s in Today’s Report:

  • What Would Stop the Bond Market Selloff? (Fundamental and Technical Perspectives)
  • October Flash PMI Takeaways – More Goldilocks Data (Chart)

Stock futures are trading lower as investors digest a mixed start to big tech earnings and a moderate rise in yields.

On the earnings front, GOOGL is down 6.75% this morning as cloud revenue missed estimates. While MSFT is up 3.30% amid a broadly positive quarterly earnings report bolstered by positive AI growth metrics.

Today, focus will be on economic data early with New Home Sales (E: 685K). From there focus will turn to the bond markets as there is a 5-Yr Treasury Note Auction at 1:00 p.m. ET that has the potential to move yields and impact equities (any further retreat in yields will be welcomed by investors).

Fed Chair Powell will be speaking after the close (4:35 p.m. ET). That is likely to result in some hesitation in the afternoon as traders position/hedge ahead of his post-close commentary.

Earnings season remains in full swing as well with quarterly results due from BA (-$3.05), TMO ($5.60), and GD ($2.87) this morning. While tech giants META ($3.62) and IBM ($2.12) report after the close.

What Would Stop the Bond Market Selloff?


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The 10-Year Yield Sits at 5.00%

The 10-Year Yield Sits at 5.00%: Tom Essaye Quoted in Barron’s


10-Year Treasury Yield Hovers Around Milestone 5% Level, Adding Pressure to Stocks

“The 10-year yield sits at 5.00% as of this writing. And the higher it goes today, the lower stocks will likely fall,” said Tom Essaye, founder of Sevens Report Research. “Today, any progress on electing a Speaker of the House will be welcomed by the markets and likely push yields lower.”

The recent, dramatic march higher in yields has added significant headwinds for stocks. Because higher returns on risk-free government debt tend to dampen demand for riskier bets, such as equities.

Also, click here to view the full Barron’s article published on October 23rd, 2023. However, to see the Sevens Report’s full comments on the current market environment sign up here.

The 10-Year Yield

If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.

To strengthen your market knowledge take a free trial of The Sevens Report.


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